Transurban boss takes the off-ramp

Matt O'Sullivan and Ian McIlwraith

TRANSURBAN, dogged for years by controversy over its payments to chief executives, is looking to replace its next boss on a ''post-GFC'' basis.

After more than four years in the top job, Chris Lynch will leave Transurban in July after he decided the ''time was right'' to pursue the ''next stage'' of his career, which is expected to include seats on more boards.

The former BHP executive became a director of Rio Tinto last year, raising concerns among proxy advisers about whether he would have enough time to devote to his role at Transurban.

Although Mr Lynch formally flagged his intent to resign yesterday, Australia's largest listed toll-road owner already has several internal candidates in mind and will now test them against possible external hires.

Transurban's chief financial officer, Tom Honan, and its New South Wales general manager, Andrew Head, are said to be among the leading internal candidates for the top job.

Mr Lynch has been credited with slashing costs and improving Transurban's perception among investors by making changes to pay distributions out of cash flow rather than from borrowings.

But his pay has repeatedly been a bone of contention among shareholders since he began in February 2008.

By the time he leaves in July, his total cash payments during his tenure will amount to at least $19.3 million, and could exceed $21 million if he earns a bonus this financial year.

Transurban endured three years of revolt over its executive pay before satisfying shareholders at its latest annual meeting in October by changing the way it rewards management this financial year.

It also earned the ire of shareholders in 2008 when it paid Mr Lynch's predecessor, Kim Edwards, more than $15 million in bonuses and termination payments on top of his $1.3 million salary.

Transurban chairman Lindsay Maxsted said the world had changed dramatically since Mr Lynch was hired in 2007 and the search for his replacement would be a good opportunity to reassess executive pay.

''That is uppermost in the board's mind as we seek Chris' replacement. Again, having said that, we will pay a commercial amount for the right person,'' he said.

Will Seddon, a portfolio manager at White Funds Management, said Mr Lynch had performed well as CEO, generating more out of the CityLink roadway in Melbourne and buying the Lane Cove Tunnel in Sydney for a bargain $630 million about 18 months ago.

''He has done well in the sense that he has tried to move Transurban away from the perceived Macquarie-type model at a time when the market wanted it,'' he said. They definitely talked a different story under him - not paying out more than what you are generating.''